Tag Archives: Business

The stated goal of the Hu Jintao-led Chinese government is a “harmonious society”. Perhaps that is why the word “Egypt” was blocked on certain search engines over the weekend. Multiple factors are in play in Egypt, but there is one vital similarity with China: Food inflation of a breadth and severity that few in the market appreciate.

China’s food inflation is different from its other inflations, notably real estate and wages. It is more dangerous. For as much as there have been spasmodic protests around the price and availability of homes and pay, and as much as there has been a gross misallocation of capital – whether viewed from the perspective of urban property investors or the gigantic follies of empty shopping malls and cities – neither wage disputes nor asset price bubbles bring down centralised political regimes.

China’s ruling Communist Party is not the broken coalition of Ireland’s Brian Cowen, nor the discredited government of Gordon Brown. With the national army literally at the party’s sole disposal and an extraordinary network of economic, commercial, media and social control, it would take something a lot more serious to unseat the powers that be; something like food.

With food prices having played a part in destabilising two autocratic regimes in Egypt’>Tunisia and now Egypt (plus possibly more from Yemen to Algeria), it’s time we canvass the unthinkable and ask could the same happen in China?

Firstly, we must consider the external causes of China’s food inflation issues. Foremost is surely the unbalanced global economic recovery, which has coupled raging demand in emerging markets with insipid demand in developed markets. The combination is explosive because the two create a feedback loop of low interest rates and quantitative easing (QE) in the US feeding inflated stock prices at home and commodity prices abroad.

In this blogger’s view, the likelihood is that these dynamics will continue. On Friday, the US Federal Reserve recommitted to completing its QEII bond purchase plan and US Treasury Tim Geithner declared growth still too anaemic to lower unemployment. QEIII is a distinct possibility.

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1. The Taqwa of Allah

And whosoever fears Allâh and keeps his duty to Him, He will make a way for him to get out (from every difficulty). (2) And He will provide him from (sources) he never could imagine. And whosoever puts his trust in Allâh, then He will suffice him. Verily, Allâh will accomplish his purpose. Indeed Allâh has set a measure for all things. [Surah Al-Talq, Verse 2-3] And if the people of the towns had believed and had the Taqwâ (piety), certainly, We should have opened for them blessings from the heaven and the earth, but they belied (the Messengers). So We took them (with punishment) for what they used to earn (polytheism and crimes). [ Surah Al-Araf, Verse 96]

2. Seeking forgiveness and repentance

“I said (to them): ‘Ask forgiveness from your Lord; Verily, He is Oft-Forgiving; (10) ‘He will send rain to you in abundance; (11) ‘And give you increase in wealth and children, and bestow on you gardens and bestow on you rivers.’ ” [Surah Nooh, Verses 10-12] “And O my people! Ask forgiveness of your Lord and then repent to Him, He will send you (from the sky) abundant rain, and add strength to your strength, so do not turn away as Mujrimûn (criminals, disbelievers in the Oneness of Allâh).” [Surah Hood, Verse 52] And (commanding you): “Seek the forgiveness of your Lord, and turn to Him in repentance, that He may grant you good enjoyment, for a term appointed, and bestow His abounding Grace to every owner of grace (i.e. the one who helps and serves needy and deserving, physically and with his wealth, and even with good words). But if you turn away, then I fear for you the torment of a Great Day (i.e. the Day of Resurrection). [Surah Hood, Verse 3]

3. Tawakkul

‘Umar Ibn Al-Khattab reported that Prophet (peace be upon him) said, “If you were to put trust in Allah (Tawakkul) the way that Allah deserves, then you would be provided for as birds are; they leave (in search of food) at the beginning of the day famished, and return at the end of the day full” [Shaykah Al-Abani’s Silsilat Al-Sahihah, # 310] And He will provide him from (sources) he never could imagine. And whosoever puts his trust in Allâh, then He will suffice him. Verily, Allâh will accomplish his purpose. Indeed Allâh has set a measure for all things. [Surah Al-Talq, Verse 2-3] Would that they were contented with what Allâh and His Messenger (peace be upon him) gave them and had said: “Allâh is Sufficient for us. Allâh will give us of His Bounty, and so will His Messenger (from alms, etc.). We implore Allâh (to enrich us).” [Surah Al-Tawba, Verse 59]

4. Constantly worshiping Allah

Abu Hurayrah stated that the Prophet (peace be upon him) said, “Allah says, ‘O son of Adam! Take time out to constantly worship me, I will fill your chest with richness , and remove your poverty. And if you do not do so. I will make your hands filled with occupation, and will not remove your poverty” [Shaykh Al-Albani declared it to authentic in his Sunan Al-Tirmidhi] Ma’qal Ibn Yasaar reported that Prophet (peace be upon him) said: “Your Lord, all glory and honor be to Him says, ‘O Son of Adam! Take the time out to constantly worship Me, I will fill your chest with richness! O Son of Adam! Do not distance yourself from Me, or I will fill your chest with poverty, and fill your hands with work ” [Shaykah Al-Abani’s Silsilat Al-Sahihah, # 1359]

5.Thanking Allah

And (remember) when your Lord proclaimed: “If you give thanks (by accepting Faith and worshiping none but Allâh), I will give you more (of My Blessings), but if you are thankless (i.e. disbelievers), verily! My Punishment is indeed severe.” [Surah Ibrahim, Verse 7]

6. Frequently performing Hajj and ‘Umrah

It has been reported by ‘abdullah Ibn Mas’ud that the Prophet of Allah (peace be upon him) said: “Follow up between Hajj and ‘Umrah (i.e. continuously repeat the performance of Hajj and ‘Umrah) because they both eliminate poverty and sins just like a furnace eliminates the dirty impurities of iron, gold and silver. And an accepted Hajj has no reward less than paradise” [ Shaykh Al-Albani in Sahih Sunan Al-Tirmidhi (1/245)]

7. Establishing the ties of kinship

Abu Hurayrah reported that the Prophet (peace be upon him) said: “Whoever is pleased with the fact that his Rizq be increased, and his life-span be extended, then let him establish the ties of kinship” [Al-Bukari, # 5985] Anas Ibn Malik reported that the Prophet (peace be upon him) said: “Whoever wishes to have his Rizq increased, and his life-span be extended, then let him establish the ties of kinship” [Al-Bukari, # 5986] Abu Hurayrah reported that the Prophet (peace be upon him) said: “Learn enough of your lineage, so that you can establish the ties of kinship, for establish the ties of kinship increases the love amongst families and multiplies wealth and extends age” [Shaykh Al-Albani in Sahih Sunan Al-Tirmidhi (2/190)]

8. Spending in the Way of Allah

Say: “Truly, my Lord enlarges the provision for whom He wills of His slaves, and (also) restricts (it) for him, and whatsoever you spend of anything (in Allâh’s Cause), He will replace it. And He is the Best of providers.” [Surah Saba, Verse 39] Abu Hurayrah said that the Prophet (peace be upon him) said: “ Allah has said: ‘O Son of Adam! Spend I will spend on you!” [Sahih Muslim (2/690)] The Prophet (peace be upon him) said: “There is not a single day in which a servant wakes that two angels come down (from the Heavens). One of them says, O’ Allah! Give to the one that spends a substitute (for what he has spent). And the other one says, ‘O Allah! Give to the one that withhold some (his money) destruction!” [Al-Bukhari #1442]

The Prophet (peace be upon him) said, “While a person was in an open area of land, he heard voice in a cloud above him say. “water the garden of so-and-so!” So the cloud immediately departed, and started pouring its rain out on a rocky plain. A large crevice in the rocks collected all of this water. So the man followed the water (in its course), and he found a man standing in his garden, using an instrument to direct this water in different directions *(to irrigate his garden). He said to him, ‘O servant of Allah! What is your name?’ The man said ‘So-an-so,’ the same name that he had heard in the clouds! Then the man asked him, ‘O servant of Allah! Why are you asking me my name?’ So he responded. ‘I heard a voice in the clouds- the same clouds that this water came from- saying, “water the garden of so-and-so” with your name. What do you interpret this as (i.e. why do you think this happened )?’ So he said, ‘If you say this (i.e. if what you say occurred), then (the reason for this is that) I see what (crops) come out of it (this garden), and I give one third in charity, and I eat with my family one third of it, and I return one third of it (to cultivate more crops)”” and in another narration, it is reported that he said, …and I give one third of it to the poor, and the beggars, and the wayfarers.’ [Muslim (4/2288)]

9. Hijrah, Emigrating for the sake of Allah

He who emigrates (from his home) in the Cause of Allâh, will find on earth many dwelling places and plenty to live by. And whosoever leaves his home as an emigrant unto Allâh and His Messenger, and death overtakes him, his reward is then surely incumbent upon Allâh. And Allâh is Ever Oft¬Forgiving, Most Merciful. [Surah Al-Nisa, Verse 100]

10. Marriage

And marry those among you who are single (i.e. a man who has no wife and the woman who has no husband) and (also marry) the Sâlihûn (pious, fit and capable ones) of your (male) slaves and maid-servants (female slaves). If they be poor, Allâh will enrich them out of His Bounty. And Allâh is All-Sufficent for His creatures’ needs, All-Knowing (about the state of the people). [Surah Al-Nur, Verse 32]

11.Supporting students of Islamic knowledge

Anas Ibn Malik said, “There were two brothers (that lived) at the time of the Prophet (peace be upon him). One of them would come to Prophet (peace be upon him), whereas the other one would seek his sustenance (by working). So the the one who used to seek his sustenance complained to the Prophet (peace be upon him) about his brother. The Prophet (peace be upon him) replied, ‘It is possible that you are provided your rizq because of him’” [Shaykh Al-Albani agreed it to be authentic, Saheeh Sunan Al-Tirmidhi(2/274)]

12. Showing kindness to the Poor

The Prophet (peace be upon him) said, “The only reason that you are aided in victory (against your enemies) and provided with sustainance due to your weak?” [Al-Bukahri (14/179)]

13. Being honest in ones dealings

The Prophet (peace be upon him) said: “The two parties of a transaction have the right (to annul the contract) as long as they don’t separate (from each other). So, if they were truthful (to one another), and honest in explaining (the defects of an item), then they will be blessed in their transaction. But, if they lied, and hid (the defects of an item) then the blessings of their transaction are destroyed” [Muslim, # 3836]

14.Making the Hereafter One’s main Concern

Once Zayd Bin Thabit wa with Marwan, the leader of the City, when he went to visit ‘Abd Al-Rahman Ibn ‘Uthman Bin ‘Affan, Abd Al-Rahman said, “Nothing caused him to come here, at this hour except a question that he wants to ask.” So he asked him (what the matter was). He replied, “He (meaning Marwan) asked us about matters that we heard the Prophet :saws: say”. I heard the Prophet (peace be upon him) say “Whoever puts this world as his only (and primary) goal, them Allah will divide his affairs for him, and He will place poverty before his eyes, and nothing will come to him of this world except that which was already written (i.e. pre-destined) for him. But whoever made the Hereafter his goal, the Allah will gather his affairs for him, and he will place richness in his heart, and the world will come to him conquered and submissive” [Al-Albani Silsila As-Saheehah, #950 ]

15. Striving to achieve the goal (for sustainance)

He knows that there will be some among you sick, others traveling through the land, seeking of Allâh’s Bounty; yet others fighting in Allâh’s Cause. So recite as much of the Qur’ân as may be easy (for you), and perform As-Salât (Iqâmat-as-Salât) and give Zakât, and lend to Allâh a goodly loan, And whatever good you send before you for yourselves, (i.e. Nawâfil non-obligatory acts of worship: prayers, charity, fasting, Hajj and ‘Umrah), you will certainly find it with Allâh, better and greater in reward. And seek Forgiveness of Allâh. Verily, Allâh is Oft-Forgiving, Most-Merciful [Surah Al-Muzammil, Verse 20] And We have appointed the night and the day as two Ayât (signs etc.). Then, We have obliterated the sign of the night (with darkness) while We have made the sign of the day illuminating, that you may seek bounty from your Lord, and that you may know the number of the years and the reckoning. And We have explained everything (in detail) with full explanation. [Surah Al-Isra, Verse 20]

Taken from Shaykh Yasir Qadhi‘s book “15 Ways to increase your earnings from Quran and Sunnah”

The economic prosperity of any country is largely due to the initiatives of the private sector and fully supported by the government thru demand-oriented facilities. The government has to introduce a laissez-faire mode of relationship with regard to industry and trade. In Pakistan, there has always been a yo-yo style relationship between the government and the business community. The over-employment in the government bureaucracy has led to abnormal increase in governmental interference, harassment, and corruption. This has come to a point where about half of the industrialist’s time is wasted on government matters such as inspections, audits, correspondence, reports, filling forms, and visits to government offices. The government must reduce the plethora of taxes, must minimize punitive measures, must lessen the visits of petty officers of myriad agencies, and must slash the tax rates if there has to be increased investment in the country.

It is essential that the government seriously revisit the General Sales Tax regime (whether it is Value Added tax or Reformed GST) and transform it into an acceptable and workable form. The present backbreaking 17% rate is criminal, it leads to temptation to evade, and is keeping traders and industrialists from registering under the system. If the VAT has to be enforced then it must be with determination and must be broad-based with all links in the chain covered. But, more importantly, it is imperative that the rate is not more than 5%, otherwise, this scheme will be difficult to implement and will remain hostage to the corruption syndrome. The present uncertain thinking by the government in GST matters is the root cause for the vicious campaign against VAT.

Furthermore, the industrialists, and more importantly, the traders would become prisoners of the discretionary, arbitrary, and coercive powers of the concerned officers. There would be frequent squabbles with the tax staff, there will be continued visitations by all kinds of agencies who will keep on demanding information which the Collectorate will already have, and there will be so much discomfiture and dejection that the industrialists and traders would be forced to cower and grovel into succumbing to the eventual and highly popular "muk-muka".

The government can become more involved in bringing about a comprehensive documentation system in the economy if it affirms its determination to continue with the process. The trend towards dilly-dallying on important issues has brought about a negative response to various governmental measures and has fortified the resolve of those who do not agree with the government’s scheme of things. It is imperative that the administration provides a sustainable solution to the process of documentation and that can only be done if the government can establish its writ but at the same time bringing about a kinder, gentler tax regime. The high-handedness of tax collectors must be checked and those elements in the tax collecting agencies that are bent upon creating a polemic condition must be removed from the scene. The government must understand that the pragmatic way to bring forth universal documentation is to provide an enabling environment.

The government must begin efforts to strengthen local bodies and this can be done by finalizing the date for local bodies’ elections and a systematic devolution of power down to the local level. The balance sheets of District Governments must be published and must be made transparent so that the citizens can get an opportunity to know what they are earning and spending and in which manner. There is immense amount of corruption in these local bodies. Fly-by-night companies are given contracts for city projects, etc. It is proposed that the government, in the first instance, target five cities, i.e., Karachi, Lahore, Peshawar, Rawalpindi, and Quetta, and divide them into zones. The road construction project, for example, could be given to one construction company for every zone, and that this company should be wholly responsible for the construction of the roads in that zone. If then the roads condition deteriorates, that company must repair it and must be penalized for shoddy work. These companies should be well-established ones, and that one-deal companies are not entertained at all. A bank guarantee could be a pre-condition to keep these companies in check.

It would not be out of place to quote the example of SITE Ltd. There is a total collapse of infrastructure in the largest industrial estate of the country. SITE Ltd needs an immediate and complete overhaul. The organization is still in the dark ages and continues to act like a mean, vicious, and demanding landlord. So much so, even the Supreme Court had to intervene and order the setting up of effluent treatment plants and a general clean-up of the estate. Of course, even today it is dirty, unorganized, encroached, and getting worse by the day. Remember, it is this same estate that provides nearly 30% of the total revenue of the government.

It is important to mention the need for an encouraging environment for textiles too. There are no two opinions that all the components of the textile sector should be confident and should be appropriately satisfied that they have been adequately backed by the government. The relevant ministries and agencies must resolve on priority basis the residual issues that still impact negatively on these constituents of the textile sector since these actions would ensue into more employment, more exports, and more industrialization.

A better and more enabling environment could be created if the government is serious about controlling the rampant under-invoicing, smuggling, and mis-declaration. The Afghan Pakistan Transit Trade Agreement is another deterrent. Labor is unmotivated and thus productivity, efficiency, and quality still haunt the industrialists. It would take years before water, gas, and electricity is available on demand. And, the less said about the monetary policy of the State Bank of Pakistan, the better. All these are impediments and roadblocks. The recent floods and the havoc it generated have formidably pushed the country’s progress. Billions would be required to bring sanity into the country. There is no political stability, there is no quality of life, and there is no continuity of policies. In spite of the oft-repeated mantra that “all is well”, the sad fact is that the road towards prosperity is full of pot-holes, it is dark, and it is under constant attack.

The solution lies in seriously and sincerely taking the industrial and business community on board. Policy making without intensive deliberations and without ascertaining the needs and demands of the industrialists and businessmen would be just another ad hoc measure. The time to change is now. The global marketplace is already becoming saturated with competitors from other nations. Pakistan cannot be a bystander or an isolated soloist in the world today. But, for now, "Le plus ça change, le plus c’est le même chose" (The more things change, the more they stay the same).

August 11, 2010

Majyd Aziz is a Karachi based Entrepreneur and a senior leader of the business community. He is a former Chairman of SITE Association of Industry, former President of Karachi Chamber of Commerce & Industry and has held posts on the board various public organizations and companies.

CARTOONIST MAXIM SO RIGHTLY HIGHLIGHTS THE OBJECTIVE OF THE GOVERNMENT AND IMF. FEDERAL TEXTILE INDUSTRY MINISTER RANA FAROOQ SAEED OF FAISALABAD “YELLS” A LA GEORGE BUSH WHO TOO BOASTED “MISSION ACCOMPLISHED” DURING THE IRAQ WAR.

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It is said that Emperor Nero fiddled while Rome burnt. The phrase ‘’Let them eat cake” is attributed to Queen Marie Antoinette, purported to be said at the peak of a bread crisis in post-revolution France. Whether these alleged incidents are true or not is a matter of debate for historians. We can only discuss that which is here, that which is now.

As the fiddlers play a mighty tune in the halls of power, life outside continues for the common man. Meanwhile in the comforts of his chambers, the hero of the downtrodden, the commander of the black coats, the champion of the masses strums a different tune on his guitar.

I don’t know much about the Chief Justice’s schooling but of one thing I am sure: he didn’t study economics or business studies. How in the name of all that is holy does the CJ expect any trader to sell at Rs 40, something that is being supplied from the source at Rs 57 or so? In all his wisdom, the Chief Justice managed to make sugar scarce in the market. So much that it is now a black market item and prices can range from Rs 80 to 120 depending on the area. Senor Chaudhry in his uneducated attempt to alleviate the suffering of his people, has left a bitter taste in the mouth for many.

In the meantime we were blessed last week by a visit of the emissary of his Royal Highness, King Obama the First. Ms Clinton swept in prior to our first handout under the Kerry-Lugar bill to make sure we were thankful for the bone our masters threw our way. The fact that it came with a new leash is of course a whole different story. And the honorable lady, ignoring the countless lives that Pakistan has laid down in the fight America started, smacked us in the face with a taunt.

Oh yeah. We love this game of hide and seek. Of course we know where Bin Laden is. We just love to see our people blown away (147 lost their lives in the fireworks show in Peshawar arranged for Lady Clinton’s visit). And the offensive in the North is just target practice for our military to keep them happy and well oiled. Why a shoe didn’t come flying towards Lady Clinton is a perplexing mystery.

As the orchestra continues to play this grand symphony, outside the grand halls of eliteness, another morning has dawned for the common man. A morning filled with the worries of spiraling inflation, the fear of sending kids to school, and a cup of tea with no sugar.